Commodity market disruptions in 1973-74 have lasting global economic impacts.
The article examines how disruptions in commodity markets, like bad harvests and speculation, can impact the global economy. Using a model that considers fixed and flexible prices, it shows that these disruptions can lead to changes in prices, exchange rates, trade, and capital flows that last long after the initial shock. The study highlights the important role of commodity markets in transmitting these shocks worldwide.